Information Systems Chapter 12: Business Analytics

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Questions and Answers

Which category of managerial decision making focuses on long-range goals and policies?

Operational control

Management control

Resource allocation

Strategic planning (correct)

What is an example of semi-structured decision making?

Inventory control

Purchasing equipment

Evaluating employees (correct)

Developing marketing strategies

Which of the following best describes business intelligence (BI)?

Analyses of past business performance to drive immediate actions

A single software tool for data analysis

A method of optimizing operational efficiency only

The infrastructure for data collection and analysis from multiple sources (correct)

Which BI tool is known for its analytics capabilities?

SAP BI software Signup and view all the answers

Which of the following is NOT considered a bi-directional aspect of business intelligence?

Random sampling Signup and view all the answers

What type of decision making is characterized by executing specific tasks efficiently?

Operational control Signup and view all the answers

Which analytics tool is specifically called OLAP?

Multidimensional analysis Signup and view all the answers

Which of the following terms relates to insights gained from examining past performance?

Business analytics Signup and view all the answers

What is the primary function of Online Analytical Processing (OLAP)?

To support complex analytical queries Signup and view all the answers

Which type of analysis does data mining NOT typically perform?

Organizing data into categories Signup and view all the answers

Decision Support Systems (DSS) are primarily used for which of the following?

Supporting judgments in problem-solving Signup and view all the answers

What does statistical procedures analysis NOT include?

Time-series analysis Signup and view all the answers

Descriptive analytics primarily aims to achieve which of the following objectives?

To summarize past events Signup and view all the answers

Which of the following is NOT a type of data mining?

Statistical mining Signup and view all the answers

Which analysis method is specifically employed to determine unknown variables?

Estimation analysis Signup and view all the answers

Which of the following best describes goal-seeking analysis?

Achieving specific desired outcomes Signup and view all the answers

What is a primary characteristic of dashboards?

They are user-friendly and supported by graphics. Signup and view all the answers

What capability allows users to view details at various levels on a dashboard?

Drill down Signup and view all the answers

Which of the following best describes 'exception reporting'?

It highlights deviations that exceed certain thresholds. Signup and view all the answers

What are the three basic roles that managers perform according to Mintzberg?

Interpersonal, Informational, Decisional Signup and view all the answers

What do key performance indicators (KPIs) represent?

Measures of critical success factors. Signup and view all the answers

In the context of dashboards, what does 'trend analysis' involve?

Examining a short-, medium-, and long-term trend of KPIs. Signup and view all the answers

Which phase of the decision-making process involves selecting among alternatives?

Choice Signup and view all the answers

What do geographic information systems primarily facilitate?

Manipulation and display of data using digitized maps. Signup and view all the answers

Why do managers require IT support for decision-making?

Most decisions must be made under time pressure. Signup and view all the answers

Which of the following phases is NOT part of the systematic decision-making process defined by Herbert Simon?

Analysis Signup and view all the answers

What is a function of dashboards regarding key performance indicators?

They track the latest data available on KPIs in real-time. Signup and view all the answers

How do dashboards assist in analyzing unstructured data?

By providing visual tools to interpret complex information. Signup and view all the answers

What does 'problem structure' in decision making refer to?

The classification of decisions as structured or unstructured. Signup and view all the answers

Descriptive analytics primarily focuses on which of the following?

Analyzing past performance. Signup and view all the answers

Which of the following is NOT a role listed under the decisional category for managers?

Leader Signup and view all the answers

In the context of business analytics, which type predicts outcomes based on historical data?

Predictive analytics Signup and view all the answers

What is the primary focus of predictive analytics?

Examining historical data to detect patterns Signup and view all the answers

Which analytics type goes beyond descriptive and predictive models by recommending courses of action?

Prescriptive analytics Signup and view all the answers

Which of the following best describes diagnostic analytics?

It examines data to answer 'Why did it happen?' Signup and view all the answers

What type of analysis would an airline use to understand why sales were low in a country?

Diagnostic analytics Signup and view all the answers

Which of the following is NOT a field where predictive analytics is commonly applied?

Data entry Signup and view all the answers

What technique would prescriptive analytics likely use to identify the best decision?

Statistical simulation Signup and view all the answers

What does descriptive analytics primarily use to convey information?

Visual reports like charts and graphs Signup and view all the answers

Which statement about prescriptive analytics is true?

It provides recommendations based on data analysis. Signup and view all the answers

Study Notes

Introduction to Information Systems - Chapter 12: Business Analytics

This chapter covers business analytics, a crucial aspect of information systems
Learning objectives include defining and exemplifying descriptive, diagnostic, predictive, and prescriptive analytics, along with presentation tools
The chapter outlines definitions, concepts, tools, the business analytics process, and presentation tools related to business analytics

Manager's Job and Decision Making

Managers perform interpersonal, informational, and decisional roles
Interpersonal: figurehead, leader, liaison
Informational: monitor, disseminator, spokesperson, analyzer
Decisional: entrepreneur, disturbance handler, resource allocator, negotiator
A decision is a choice among alternatives, and decision-making is a systematic process
Herbert Simon's decision-making process involves intelligence, design, choice, implementation, and evaluation

Why Managers Need IT Support

The number of alternatives for decisions is growing rapidly
Decisions often need to be made under time pressure
Decisions are becoming more complex in nature
Decision-makers, as well as the information they use, can be dispersed geographically

Framework for Computerized Decision Analysis

Decisions are categorized based on structure (structured, semi-structured, unstructured) and nature (operational control, management control, strategic planning)
Structured decisions involve clearly defined procedures, like accounts receivable
Semi-structured decisions have some predefined procedures and other parts that need to be analyzed, for instance scheduling
Unstructured decisions lack clear procedures and are often unique, such as selecting a magazine cover
Different types of decisions need different support tools

Problem Structure

Decision-making processes vary based on problem structure ranging from highly structured to highly unstructured
Examples provided include inventory control (structured) and evaluating employees (semi-structured) and new services (unstructured)

Nature of Decisions

Operational control deals with executing tasks effectively
Management control involves resource acquisition and utilization for organizational goals
Strategic planning focuses on long-term goals and resource allocation

Business Intelligence Tools

Business intelligence (BI) tools collect, store, and analyze data from multiple sources to help strategic decision-making
Examples of BI tools include SAS, IBM SPSS, SAP BI, and Microsoft Power BI software

Concepts

Business analytics (BA) uses skills, technologies, and practices to analyze past business performances for insights
Business intelligence (BI) refers to the infrastructure that collects, stores, and analyzes data from a company's activities; a broad term encompassing business analysis, process analysis, text mining, performance management, and benchmarking

Business Analytics Tools – OLAP

Online analytical processing (OLAP) is a technology that organizes large business databases and supports complex analysis without impacting transactional systems
OLAP cubes are multi-dimensional arrays of data enabling complex analytical queries

Business Analytics Tools – Data Mining

Data mining identifies anomalies, patterns, and correlations in large datasets to predict outcomes.
Data mining includes various types, such as pictorial, text, social media, web, audio, and video mining

Business Analytics Tools – DSS

Decision support systems (DSS) are computerized programs that aid in decision-making and action courses by sifting and analyzing massive amounts of data
Spreadsheets can also be used as DSS

Business Analytics Tools – Statistical Procedures

Statistical procedures use data to test relationships between two or more data sets
Techniques include estimation analysis, cluster analysis, and classification analysis

The Business Analytics Process

The business analytics process involves descriptive, predictive, and prescriptive analytics
Descriptive analytics examines what has happened (data mining, OLAP, DSS)
Predictive analytics anticipates future events using historical data (data mining, linear/multiple/logistic regression)
Prescriptive analytics recommends actions and outcomes based on predictions (optimization, simulation, decision trees)

Diagnostic Analytics

Diagnostic analytics determines the reasons behind past events (drill-down, data discovery, data mining)

Descriptive vs. Predictive vs. Prescriptive Analytics

Descriptive analytics describes past performance
Predictive analytics identifies future trends and outcomes
Prescriptive analytics suggests best decisions or courses of action

IT's About Business

The role of IT in integrating UPS operations and how wireless technologies enabled operational improvements through use of information systems

Presentation Tools

Dashboards provide easy access to timely information and management reports

Dashboard Capabilities

Drill-down: accessing details at various levels
CSFs: critical factors for business success
KPIs: key performance indicators
Status access: up-to-date data
Trend analysis: showing short-, medium-, and long-term patterns
Exception reporting: flagging deviations

Sample Performance Dashboard

Displays visualizations of website visits, costs, revenues, key performance indicators

Bloomberg Terminal

An example of a real-time data display platform

Management Cockpit

Provides an overview of key metrics for efficient decision-making

Geographic Information Systems (GIS)

GIS provides computer-based systems for capturing, manipulating, and displaying data with maps
Enables geocoding (assigning geographical locations) for each record

Closing Case: Dark Analytics

Discussion revolves around how dashboards facilitate the analysis of unstructured data and the types of dark data provided to internet and other IT systems

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Description

This quiz focuses on Chapter 12 of the Introduction to Information Systems, which delves into business analytics. It covers various types of analytics, the business analytics process, and the tools used for presentation. Additionally, the role of managers in decision-making processes is explored, highlighting the need for IT support in those roles.